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USD JPY Price Tests Key Fibonacci Level


Jan.11.2017

The US dollar had a crazy day on Wednesday, and USD JPY price dropped massively as US president elect, Donald Trump held his first press conference. Is the Trump rally over? Let analyze USD/JPY from different points of the IDDA approach to develop a trading strategy

 

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Fundamental Points

Trump's press conference was combative and defensive. While he covered Russia’s interference allegation and discussed plans to address ethical questions around separating the presidency from his business dealings. It was certainly not as market friendly as the pro-growth acceptance speech he gave in November.

Meanwhile the volatility could continue on Thursday as US Initial Jobless Claims (JAN 7) will be released at 1:30 PM GMT, followed by the US Monthly Budget Statement (DEC) at 7 PM.

On Friday Fed head Janet Yellen is set to Address Town Hall with Educators first thing at 12 AM GMT.

We could see USD JPY price volatility picking up once more as the US releases their Advance Retail Sales (DEC) as well as PPI numbers at 1:30 PM GMT. Prelim UoM Consumer Sentiment will be released at 3 PM followed by Baker Hughes U.S. Rig Count at 6 PM GMt to end the trading week.

USD JPY Price Action: Technical Points

 

Short-medium term: On the news, the USD/JPY pair tested the 61% Fibonacci level at 114.22 before correcting massive losses. Resistance remains at 117.50 and the pair remains above the daily Ichimoku cloud.

 

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The pair started Thursday's Asian session under further pressure, with the Chiko span just about to cross below the USD JPY price on the candlestick daily chart. The Tenkan is close to cross below the Kijun line. However we are dealing with a very thick cloud.

USD JPY Price Action on Daily Chart USD JPY Price Action on Daily Chart

 

Long term: On the monthly basis, the pair has yet to completely erase December's gains. The long-term resistance is set at 124.27

 

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USD JPY Price Action:  Market Sentiment

The trading crowd has flipped from net-short to net-long from last week in USD/JPY. The combination of current sentiment and recent changes gives a further bearish trading bias.  Stay tuned for more on USD JPY price action in our investing group.

 

USD CAD Trading Strategy

If you are an Invest Diva student, you should be able to put the technical, fundamental and sentimental points of the IDDA approach together and develop an investment strategy based on your risk tolerance. For further help, please visit our investing group.

Here are Invest Diva's calculations for important approximate levels for USD JPY price to keep an eye on:

 

Support Levels Turning Point Resistance Levels
108.70 114.22 117.50
111.50 117.50 124.27

 

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